Nature and environment of cost management among early nineteenth century U.S. texitle [i.e. textile] manufacturers

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The Accounting Historians Journal Vol. 19, No. 2 December 1992
1992 Vangermeersch Manuscript Award
Thomas Tyson ST. JOHN FISHER COLLEGE
THE NATURE AND ENVIRONMENT OF COST MANAGEMENT AMONG EARLY NINETEENTH CENTURY U.S. TEXITLE MANUFACTURERS
Abstract: Several authors have suggested that a particular managerial component was needed before cost accounting could be fully used for accountability and disciplinary purposes. They argue that the mar-riage of managerialism and accounting first occurred in the United States at the Springfield Armory after 1840. They generally downplay the quality and usefulness of cost accounting at the New England textile mills before that time and call for a re-examination of original mill records from a disciplinary perspective.
This paper reports the results of such a re-examination. It initially describes the social and economic environment of U.S. textile manu-facturing in New England in the early nineteenth century. Selected cost memos and reports are described and analyzed to indicate the nature and scope of costing undertaken at the mills in Lowell, Massa-chusetts, in the late 1820s and early 1830s. The paper discusses how particular cost information was used and speculates why certain more modern procedures were not adopted. Its major finding is that cost management practices fully measured up to the business com-plexities, economic pressures, and social forces of the day.
Several recent studies of nineteenth century cost manage-ment1 [Hoskin and Macve, 1988; Ezzamel, Hoskin and Macve, 1990] have suggested that a particular managerial component was needed before cost accounting could be fully used by owner/managers for accountability and disciplinary purposes.
This research was financially supported by St. John Fisher College's Sum-mer Grant Program.
1 The expression "cost management" best describes the use of cost informa-tion by nineteenth century mill owners and managers. The terms "cost manage-ment", "cost accounting", and "cost keeping" all generally represent the use of cost-based information to assist management and are used interchangeably throughout the paper.